The government, through Ministry of Economy and Finance (MEF)reopens this Tuesday the Treasury Note Series 10 for 950 million pesos, a tender that will serve to gauge the market’s appetite for instruments in local currency after their profitability has dropped in recent weeks.
The current value of the Series 10 Treasury Note, with a term of 5.5 years, will amount to 5,757 million pesos. The closing of the tender will be at 2:30 p.m. on Tuesday and the settlement will be the following business day, that is, Wednesday.
According to Debt Management Unit (UGD), the NT will have a coupon of 10.50% per year. In turn, the payment of interest will be semi-annual, every August 1 and February 1, until February 1, 2029, the expiration date, where the amortization will take place, in a single time.
All local investors authorized by the Central Bank of Uruguay (BCU) may present their offers in this tender. Non-resident investors, for their part, may do so through a local bank or broker, or through Global Depositary Notes (tradeable on Euroclear, Clearstream and DTC), if available.
According to the UGD, “the tender will be structured as a single price auction, which means that all accepted offers will be awarded at the same price” and “the minimum amount of each offer will be 100,000 pesos, in multiples of 10,000 pesos.” The total bids per institution cannot exceed the amount authorized to be awarded by the issuer (200% of the bid amount).
In turn, will be accepted as a means of payment Series 27 Treasury Notes (UI), series 13 (UI) and Series 1 (UP) and it will also be possible to integrate as a form of payment, the Monetary Regulation Bills issued by the BCU in all maturity terms.
A test for the MEF in the midst of a fall in nominal rates in pesos
The reduction in inflation and the more than likely cut in the monetary policy rate (TPM) by the BCU next week, is driving a drop in the cut-off rate for securities issued in national currency.
Just as an example, the global bond in pesos 2033 released on july 11 for him Ministry of Economy and Finance reduced its annual yield in less than a month, by spending from 9.75% to 9.05%.
The drop in the sovereign bond is in line with the significant drop in rates in nominal pesos in recent weeks, somewhat boosted by the latest inflation data, which placed the CPI at 4.79%, close to the center of the government’s target range and in the lowest level since November 2005, which would prompt a cut in Interest rates reference of up to 75 basis points.
Source: Ambito
